Only in Washington could a proposal which penalizes the middle class by forcing them to pay for decades of flawed economic policy–while also handing out huge new tax breaks to the wealthiest Americans– be described as ?shared sacrifice?. But that?s exactly the fiscal framework provided in the ?Gang of 6? plan released yesterday.
?It would include an “immediate” $500 billion in cuts. It would be two bills, one that implements an immediate $500 billion in cuts and would raise the debt ceiling, and a second that would implement larger reforms. While the executive summary goes to great lengths to say that Social Security should be dealt with on a separate track, it does keep Social Security in the mix with a strange proposal that would hold the larger deficit plan until a Social Security fix is found, but if that fix does not get the 60 votes required, the rest of the deficit plan is voided. That would hold both Social Security and further deficit reduction hostage. Guess which would lose.? Daily Kos
You have to ask yourself?if deficit reduction really is Congress? true goal then why in the world would lawmakers agree to throw out any future Deficit Reduction package passed by 60 votes (which would be an incredibly hard-fought piece of legislation, especially given this current climate) if a second piece of legislation mandating Social Security reforms does not also pass? In short, the Gang of Six has made cutting Social Security benefits more important than deficit reduction by legislating that any deficit bill will be held hostage for Social Security cuts. So much for the claims made in its executive summary that this proposal will:
?Reform Social Security on a separate track, isolated from deficit reduction?.
Beyond this mandatory Social Security legislation required by the Gang of Six, their plan also calls for immediate cuts in Social Security benefits by changing to a COLA formula designed to cut benefits.
?The plan also includes cuts to Social Security that would be felt in less than six months, and the proposed cuts to Social Security are cumulative. This means that after ten years, a beneficiary in her 70s will see a cut of close to 3 percent. After 20 years, the cuts for beneficiaries in their 80s will be close to 6 percent, while the reduction in annual benefits will be close to 9 percent by the time beneficiaries are in their 90s. For a beneficiary in her 90s living on a Social Security income of $15,000, this means a loss of more $1,200 a year in benefits.? Dean Baker, CEPR
In case you?re not quite angry enough, now let?s consider what this ?fair and balanced? plan does on the issue of taxes. First, it cuts Middle America?s ability to claim tax deductions for health, charitable giving, homeownership, and retirement, while at the same time reforming the entire tax code to allow permanent tax cuts for wealthy Americans (think of it as the Bush tax cuts on steroids).Here?s Dean Baker again:
“The plan also calls for large cuts in tax rates including a targeted top rate of between 23-29 percent, which will be at least partially offset by elimination of tax deductions. For the highest-income people, this is likely to mean a very large reduction in taxes. For example, Jamie Dimon and Lloyd Blankfein, the CEOs of J.P. Morgan and Goldman Sachs, respectively, are both paid close to $20 million a year at present. If this pay is taxed as ordinary income, then they would be paying close to $7.5 million a year in taxes on it after 2012. However, if the top rate is set at 29 percent, they may save as much as $1.9 million a year on their tax bill. If the top tax rate is set at 23 percent then the Gang of Six plan may increase their after-tax income by more than $3 million a year.
Incredibly, these are the values President Obama says he too supports.In short, here?s the simple breakdown of the Gang of Six proposal:
Balanced Approach = Middle Class Benefit Cuts + Tax Cuts for the WealthyReform Social Security on a separate track = Legislatively tie Social Security Cuts to any future Deficit PlanSocial Security ?Reform? = Large benefit cuts starting immediately, with more to follow in another bill
Poll after poll has shown these are NOT America?s priorities yet Washington continues on its destructive path targeting Middle America to foot the bill for fiscal failures of the past. Tell Washington, benefits cuts for working families combined with tax cuts for billionaires is not fiscal responsibility. We?ve activated our Legislative Action Center and have a new letter you can email to your members of Congress and the White House.Tell them you will not stand by and watch as America?s vital programs are destroyed while billionaires collect even more in tax cuts.